Category Archives: Small Businesses

Everyone makes mistakes and its how we learn and new business owners are no exception to this rule.

Here are the top 10 mistakes that nearly all business owners make :

#1 – Thinking too small or too big

If you think too big, you can wind up biting off more than you can chill. Alternatively, if you think too small, you may be missing out on valuable customer opportunities. It is important to be aware how much business you can handle and position yourself for expansion.

#2 – Losing your focus or drive

Too many new business owners get caught up in the excitement of opening new business and overwork themselves too much too soon. Remember that opening a new business is a long term project and you need to stay focused. Yes you’re going to work long hours but be sure to take breaks and not overexert yourself too soon.

#3 – Taking on too much by yourself

You cannot do everything on your own and if you try to then you can lose your energy quickly. It is always a good idea to seek help of others. Such as employees or professional services. Then you can focus on your own goals and not worry about the smaller details.

#4 – Sacrificing your personality

Your business is an extension of you. As a business owner you will likely work long hours and when you are not working, you will probably still be thinking about your business. In order to make this kind of commitment you need to love your business and know that it is a part of you.

#5 – Not tracking your advertising

When you spend money to advertise your business it is important to know if your money is being spent effectively or not for example it is wasteful spending thousands of dollar for a billboard that never generates new customers. The only way to know if you’re advertising is affected is to track it.

#6 – Investing too much in one client
New business owners are often quick to rearrange their entire business structure for the first big client but make sure not to put all your eggs in one basket. Not every client will last forever and you do not want to be forced to close your business if you lose that one big client.

#7 – Going against your gut instincts

When you open a new business you will want to heed the advice of others. But do not let it overshadow your gut instincts. When all is said and done you are the business owner and you need to trust your own ideas.

#8 – Not getting involved in the community

Attending local events and becoming the active member of the community are great ways to get free attention to your business. Networking is a important part a building up good business relationship that can directly lead to customer opportunity.

#9 –Managing Employees poorly

Poor employee management can be detrimental to a new business owner. Managing employees is not something that comes naturally to everyone and creating bad relationship with employee can create serious problems for a business owner.

#10 – Trusting that sign contracts will be honored

Although any documents that contains an agreement and signatures is technically and legally binding contract. In order to enforce it you will have to go to court. This can cost thousands in legal and a waste of business owners valuable time. Business agreement or relationships that are based in trust. If you keep quality relationships, trustworthy client then you will not have to worry as much about what is written on paper.

Well there you have it if you make a conscious effort to avoid these common mistakes then you will find it much easier to open and operate your new business.

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Accounting & Bookkeeping mistakes will impede the expansion of your business and land it on shaky ground. Sadly, errors are all too common, particularly for brand new or young businesses.

Insight on how to avoid making these bad-for-business bloopers yourself.

Mistake #1: Not keeping track of your receivables

“Getting paid is always an exciting part of running a business. What isn’t as exciting however, is staying on top of receivables.

“When you issue an invoice, a due is recorded—meaning that a client owes you cash. Checking your due listing you’ll see that customer’s balance as outstanding. As before long as you receive payment from that client, it ought to be applied against the invoice to mark it as paid. In practice however, this is often easier said than done, and client deposits are often left to reconcile afterward since there’s never enough time in a day.

Mistake #2: Not keeping expense receipts

“Many business homeowners fail to save copies of trade expense receipts, which may lead to a series of tax, accounting, and income issues. how many times have you ever checked out your bank account statement and had no clue what that $100 charge is? Is it a business meal, supplies, an equipment—or is it a personal expense you mistakenly paid for using your business card? Not having an actual receipt which will provide you with details regarding the charge can result in incorrectly reported tax expenses and a high bill if you’re ever audited.

Small business house owners usually try and save cash by doing their own taxes. In reality, not hiring a professional will price big bucks down the road. you may not claim all the deductions you qualify for, otherwise you might pay your tax bill—leading to penalties and other alternate fees.

Spending the cash to hire a professional, means that you’ll have an expert who knows what they’re doing, and can apply the proper techniques for your Financial situation. They can keep updated on the changing tax laws and assist you set up ahead for potential tax hikes.

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During January

All employers – Give your employees their copies of Form W-2 for 2014 by February 2, 2015. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by February 2.

January 12

Employees – who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070, Employee’s Report of Tips to Employer.

January 15

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December 2014.

Individuals – Make a payment of your estimated tax for 2014 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2014 estimated tax. However, you do not have to make this payment if you file your 2014 return (Form 1040) and pay any tax due by February 2, 2015.

Employers – Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December 2014.

Farmers and Fisherman – Pay your estimated tax for 2014 using Form 1040-ES. You have until April 15 to file your 2014 income tax return (Form 1040). If you do not pay your estimated tax by January 15, you must file your 2014 return and pay any tax due by March 2, 2015, to avoid an estimated tax penalty.

February 2

Employers – Give your employees their copies of Form W-2 for 2014 by February 2, 2015. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee by February 2, 2015.

Employers – Federal unemployment tax. File Form 940 for 2014. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 10 to file the return.

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2014. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.

Employers – Nonpayroll taxes. File Form 945 to report income tax withheld for 2014 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

Individuals – who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2014. Filing your return and paying any tax due by February 2, 2015 prevents any penalty for late payment of last installment.

Payers of Gambling Winnings – If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W-2G.

Certain Small Employers – File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2014. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more from 2014 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return.

All businesses – Give annual information statements to recipients of certain payments you made during 2014. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient.

Forms 1099-B, 1099-S, and certain reporting on Form 1099-MISC, Miscellaneous Income, are due to recipients by February 17.

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If you’re going to be a successful small business owner you need the spirit of an entrepreneur and also the heart of a sole businessman. An entrepreneur’s spirit helps you imagine and then create your business. However it takes the heart of a sole businessman (not the legal structure, rather the attitude that “I turn the lights on and that I turn the lights off”) to stay along with your business when you have to attend to the everyday, mundane things like accounting, banking, credit policies, personnel problems, prospecting, etc.